Ticketbis founders launch €66.5m VC fund
All Iron Ventures, a Bilbao-based venture-capital firm founded by Ticketbis co-founders Jon Uriarte and Ander Michelena, has launched its first fund, worth €66.5 million, to invest in online marketplaces and other ecommerce businesses in Europe and the Americas.
Uriarte and Michelana founded Ticketbis, a secondary ticketing site which became dominant in Spain, Latin America and Asia, in 2009. The pair sold the company to StubHub in 2016 for a reported €165m.
The new fund, All Iron Ventures I, is one of Spain’s largest-ever ‘first’ fund raises and brings All Iron Ventures’ total investment capacity to around €110m. According to the company, the money has been completely raised from private investors, with no public support from Spanish or European institutions.
“All Iron Ventures partners up with bold founders promoting innovative start-ups”
“As first-time [fund] managers, we are delighted for having been able to close our first fund the way we have,” says Michelena. “We are proud of such an achievement and thankful to our investors for trusting us.”
ALl Iron Ventures is part of the broader All Iron Group, run by co-directors Hugo Fernández-Mardomingo and Diego Recondo, which also includes a publicly listed property company.
“All Iron Ventures partners up with bold founders promoting innovative start-ups. We know what it is to be a founder and empathise with the challenges our partner founders face,” comments Uriarte. “Our commitment and alignment with them are a win-win in terms of collaboration, growth and profitability for them and us.”
Existing All Iron investments include online learning marketplace Preply, electric scooter company Lime, pet care start-up Barkyn and refurbished electronics seller Refurbed.
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Buying and selling for beginners: Mayland CEO talks industry M&A
Investments and takeovers are the core business of Matthias Just, CEO of Mayland AG. Before becoming a lawyer Just completed an apprenticeship as a banker, and his CV includes positions in the UK and US at companies including Deloitte and Touche Corporate Finance.
Since the end of 2005, he has been a member of the board of Mayland AG, a Dusseldorf-based company specialising in mergers and acquisitions – including the likes of the takeover of Parookaville by Superstruct, whose portfolio also includes Flow Festival, Sonar, Sziget and Wacken Open Air, and is backed by Providence Equity Partners, which manages more than $45 billion worth of investments.
IQ spoke to Just (pictured) about why the live music industry is increasingly attractive to institutional investors – as well as how external investment companies can offer a compelling alternative to the major multinational concert businesses…
IQ: What is the external perception of the live music industry in the financial sector?
Matthias Just: The live music industry is growing and a stabilisation of turnover and profitability figures can be seen across most companies. Besides this, there are always new festivals that draw attention to themselves through innovative concepts and designs and are able to assert themselves in the market. In general, demand is still very high, despite increasingly high ticket prices.
In recent years, we have noticed that consumers in the leisure and entertainment sector have seldom been price-sensitive and are prepared to pay higher ticket prices in order to spend a weekend at their favourite festival. This willingness to pay is what distinguishes this industry and makes it interesting for strategic investors, as well as financial investors and corporate holdings.
On the other hand, what is the current situation of the financial market in terms of potential investors and investments?
It was inevitable that Brexit, the [US-China] trade dispute and the signs of an imminent recession would not leave investors unscathed. Therefore, we can perceive a slight increase in uncertainty across the market as a whole, which will – should the signs of an economic downturn become clearer in the coming months – lead to a reallocation of investors’ investment focus.
In this sense, this means that companies in a sector that is independent of economic cycles – such as the events market – will be given preference over cyclical investments, which generally tend to be negatively affected in times of recession.
“This willingness to pay is what distinguishes this industry and makes it interesting for strategic investors”
What role does Mayland play in the M&A process?
We see ourselves both as consultants and coordinators. Within an M&A transaction, on which we act both on the buyer and seller side, we coordinate all necessary services in order to achieve a successful conclusion of the transaction. In addition to classic sell- or buy-side M&A advice, our range of services also include succession planning, financial advice, company valuation and strategic business development.
There are many in the concert industry who worry about the involvement of external investment companies. Are they right to be concerned?
These reservations about external investment stem from the public debates about the financial sector due to the financial crisis in 2008. Also, various companies have been forced to cut jobs after an investment company had joined them – and even today, some entrepreneurs still face a loss of control when taking an investment on – but this process is anything but inevitable.
While anyone who sells shares in a company loses some control, the manner in which this transfer of control takes place is an important factor that a seller can influence significantly before the transaction is completed – a crucial point at which we come into game and, together with the current owner and management of a company, determine how this transfer should be structured from the seller’s point of view.
There are many understandable motives for dealing with the topic of participation [from the investment sector] from the entrepreneur’s point of view. However, those who are not familiar with participation systems and legal framework conditions should take on professional support, even in the case of a first initial meeting with a potential buyer.
“Companies in a sector that is independent of economic cycles – such as the events market – will be given preference over cyclical investments”
In one sense, AEG, CTS Eventim and Live Nation are investors, too. Aren’t these companies the better investors than those who have little or no industry knowledge?
In terms of strategic fit, these players in the industry are certainly good candidates – concert companies or festivals can benefit from the networks of these companies and partially improve their operative business. On the other hand, these investors usually require a majority stake (usually more than 50% – ie a qualified majority with which they can enforce all strategic decisions), which means that the seller can lose control of his or her festival, at least in the legal sense.
For smaller companies that are looking for a strategic partner, but do not want to give up control over their business, other strategic investors or financial investors may be the better alternative.
Providence Equity, as a financier of Superstruct, is a prominent player in concert takeovers. Do you expect other big players from the private-equity sector to increasingly be interested in the live music industry in the future?
That’s quite possible. However, Providence Equity’s Superstruct vehicle and its managers [including CEO James Barton, ex-Creamfields/Live Nation] are industry experts who know the festival business very well and usually have experience as festival organisers themselves.
This expertise is particularly important in an industry such as live entertainment, because the structures are special and personal aspects play a meaningful role.
However, in addition to Providence, there are many other investment companies with a strong interest in the festival industry.
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AEG backs $115m Sapphire sports/entertainment fund
Technology-focused venture-capital investor Sapphire Ventures has launched Sapphire Sport, a US$115 million fund which will invest in early-stage start-ups “at the intersection of sports, media and entertainment”.
According to California-based Sapphire, which manages more than $2.5 billion worth of assets, Sapphire Sport combines the firm’s investment experiences with “premier global sporting, media and lifestyle brands”, including Manchester City FC owner City Football Group, other US sports teams from the National Football League (NFL), Major League Baseball (MLB), National Basketball Association (NBA), National Hockey League (NHL) and Major League Soccer (MLS) and investors such as AEG, the Bank of Montreal, Adidas and US television giant Sinclair Broadcast Group (SBG).
Sapphire Sport launches with a portfolio of five start-ups: including Tonal, a digitally connected home fitness system; Mycujoo, a live football streaming platform; Overtime, a digital sports network; Fevo, a social commerce solution for live events; and Phoenix Labs, an independent gaming studio launched by the creators of Dauntless.
Sapphire Sport is be co-led by Doug Higgins, managing director and co-founder of Sapphire Ventures, and Michael Spirito, who joined Sapphire Ventures as managing director in September 2018 from 21st Century Fox.
“The opportunity we are addressing is vast and diverse”
“Venture capitalists need to continue to reinvent and innovate in order to stay relevant,” comments Higgins. “We created Sapphire Sport to serve as a preeminent investment vehicle in a nascent and dynamic sector where technology investment experience is in increasingly high demand. In partnership with some of the most innovative team owners and sporting brands in the world, we are bringing Sapphire Ventures’ investment experience to the global sport marketplace.”
Other Sapphire Ventures investments in the entertainment space include Ticketfly, now owned by Eventbrite, and India’s Paytm, the parent company of ticketing platform Insider.in.
Adds Spirito: “The opportunity we are addressing is vast and diverse. Sport is the one thing we can all agree on – even as we may disagree on our fan loyalties.
“I joined Sapphire Ventures because I believed that they had the best platform to build an investment firm of consequence in this industry. From a market perspective, sport includes all global sports media rights, distribution technologies, content creation, sponsorship, digital fitness, esports, betting, data and everything in between.”
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